Investors tend to say “no” a lot more than they say “yes” to founders. Here are some of the top reasons why.

It’s no surprise that venture capitalists say “no” to requests for investment more often than they say “yes.” However, they’re not always explicit about why they pass on a deal. Here are a few of the top reasons why VCs decide not to back a startup.

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1. It’s Not The Right Time To Invest

An entrepreneur might have a great business idea, but it’s just not the right time to launch. They need to wait a little longer for their product or service to really take off. Stephanie Palmeri, partner at Uncork Capital, says she needs to “believe that the entrepreneur has timed their entry into the market well. Will they be able to ride a rising tide of customer adoption? Or will they need substantially more time and capital until the market is ready to adopt en masse?”

2. The Founder Isn’t The Right Person To Build The Company

Timing may matter, but it isn’t everything. VCs also place a lot of emphasis on the founder. According to Shauntel Poulson, partner at Reach Capital, it’s crucial that the founder is the right person to build and scale the company. “I need to be convinced that the entrepreneur is uniquely positioned to start the company, giving them a competitive advantage,” she explains. How? “I look for evidence, such as having personal experience with the pain point they are addressing, a deep understanding of the market, and a relentless passion to improve the industry they are operating in.”

3. They Don’t Have Time To Take On More Investments

Sometimes VCs just don’t have enough time to add to their portfolio. “There are so many circumstances unrelated to the entrepreneur that can prevent a firm from saying ‘yes,'” says Amit Mukherjee, partner at NEA. “At the seed stage, individual partners are making many more deals per year, he says, but “at the Series A stage and beyond, partners are typically only leading one to two deals a year, so they’re thinking about how a deal will fit into their portfolio, existing time commitments, and their personal interests.” According to Mukherjee, that means that “even very good companies will be surprised how long it can take to get a deal done.”

4. The Founding Team Is Too Small

Silicon Valley many like to glorify “lone ranger” founders, but for VCs, a company with just a single founder can be a warning sign. “A single founder is a red flag for me,” says Jacob Shea, partner at Structure Capital. “The law of averages thus far in our portfolio of dozens of companies shows that dual teams perform better. If a founder doesn’t have a strong partner, that may be okay,” he explains, “but we need to see someone significant alongside the founder, such as committed mentor or a strong adviser, with deep knowledge of the space.”

5. The Business Just Isn’t That Exciting

Chirag Chotalia, principal at DFJ, only gets to invest in two or three deals a year. So he only picks companies that keep him up at night. Chotalia explains, “Often, there is nothing wrong with the business,” but since he can only commit to funding a handful of founders, he only backs those where he goes “home at night and can’t stop thinking about it for days in a row.”

Chotalia adds, “If I do not have this obsession, I pass. I remind myself this, too: I work my ass off on behalf of a founder, so I better be consumed by the startup and what it is aiming to solve.”

About the author

Beck Bamberger founded BAM Communications in 2008 and writes regularly for Forbes, Inc., and HuffPost about entrepreneurship, public relations, and culture.